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A franchise where the franchisor provides a few general guidelines to the franchisee is known as

a. a business-format franchise.
b. manufacturing franchise.
c. product-distribution franchise.
d. general service franchise.
e. business franchise venture.

User TimmyJ
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1 Answer

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Final answer:

The correct answer is option c. The type of franchise where the franchisor provides only a few general guidelines is called a product-distribution franchise. In this model, the franchisee sells the franchisor's products and the relationship resembles a supplier-dealer more than the comprehensive systems found in business-format franchises.

Step-by-step explanation:

A franchise is a business model where a party (the franchisee) acquires the rights to open and operate a business using the trademark, branding, and business systems of a larger company (the franchisor). There are different types of franchise agreements, varying in the amount of control or guidance provided by the franchisor. Among the options provided in the question:

  • (a) A business-format franchise offers a comprehensive system for operating the business, including training, a business plan, and ongoing support.
  • (b) A manufacturing franchise grants the authority to produce and sell goods using the franchisor's brand and specifications.
  • (c) A product-distribution franchise operates similarly to a supplier-dealer relationship where the franchisee sells the franchisor's products.
  • (d) A general service franchise typically refers to businesses providing services rather than goods.
  • (e) Business franchise venture is not a standard term used in describing franchise types.

The type of franchise where the franchisor provides a few general guidelines to the franchisee is best described as a product-distribution franchise. This model involves the franchisee selling franchisor's products and is usually less comprehensive in its systems and controls compared to business-format franchises.

Therefore, the correct option for the question provided is (c) product-distribution franchise.

User Ajinkya
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